MADE IN NIGERIA CARS: Innoson Motors Nigeria

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Read Time:3 Minute, 23 Second

Seeing a Nigerian made car come to reality has always been a bed time story with generations after generations without any glimpse that it will come to be. With all optimism about Nigeria I also considered the vision for by and by. There are too many factors that inhibit Nigerian made goods which could pass for a very good excuse not to invest in the country. With this in consideration we can reason that all odds are stacked against a huge industry such as automobile manufacturing.

Many people have tried in the past but ends up either giving up or blaming the government for failing them. Whatever their reasons are it could be justified. But someone against all odds decided to take the bull by the horn and so far is a success. Innocent Ifediaso Chukwuma, the C.E.O of Innoson Group.
Innoson Group Nigeria Limited is Nigerian Automobile Company dating back to 1986 when it started with the importation of motorcycle parts into the country. By early 2000s the company decided to start the local production of motorcycle parts and its assembling in Nnewi in order to reduce the price of motorcycles in Nigeria. The success of this motivated Innoson to go for the bigger picture which is the manufacturing of vehicles.

On the 15th of October 2010, President Goodluck Jonathan officially commissioned the product that the whole continent and the world have been waiting for. The President and other dignitaries including foreign observers was amazed to see the range of products in the company’s show room comprising of 17 and 43 seater buses (luxury buses, midi-buses and mini-buses), pick-up vans and sports utility vehicle all looking as classy as foreign made ones.

The cars unbelievably is argued to be about 80% Nigeria while some argue its 90% made in Nigeria as all the components were designed and moulded by the company while other parts were sourced from the several automotive parts companies in Nnewi, Anambra State Nigeria.

Before the advent of Innoson only government or companies heavily supported by the government could set up such a gigantic plant. For Innoson to come up with this, the company deserves all the support and patronage it can get.

There are roles to be played by the government and roles to be played by Nigerians to ensure that this company is a success.

Roles of Government

1. The Government should play the basic roles of providing a conducive environment with basic amenities such as good roads, electricity and security.

2. The government should grant the company tax holiday and grant the company zero tariff on Complete Knock Down (CKD).

3. The Government and its agencies should evoke Gazette N0 28 of 1993 which states that all the tiers of government should be the first to patronize made in Nigeria products if it could fulfill the basic need required.

Roles of Nigerians

1. Nigerians should be the ones to promote our “First National Car”. This is because many Nigerians will expect the government to perform magic while receiving the news of the cars themselves with skepticism such as “Nigerian made goods are inferior”, thereby demotivating the whole society.

2. Accepting the car comes with patronizing it. An average Nigerian has at least 2 or more cars this means that every Nigerian should have an Innoson car.

Innoson Group

1. The company should not think local and expect Nigerians to buy just anything. They should ensure that the car designs are innovative and that classy touch is added to their cars. The company should ensure that the car designs and safety measures meets international standard.

2. The company should think outside Nigeria as Nigerian market may not produce the required success. It should think of exporting to other African countries.

With all these in place, I can say that Innoson motors will be a giant as its country home “Nigeria” is.

Once again, a very big job well done to Innoson Group, you have made Nigeria Proud!!!  

About Post Author

Anthony Claret

Anthony-Claret is a software Engineer, entrepreneur and the founder of Codewit INC. Mr. Claret publishes and manages the content on Codewit Word News website and associated websites. He's a writer, IT Expert, great administrator, technology enthusiast, social media lover and all around digital guy.
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Meet Inspiring Nigerian Entrepreneur – Chindeu Chigbo

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Read Time:11 Minute, 34 Second

From frying Akara, this lawyer now has fast food chain… Says, “It pays to be self-employed”

Background

“I have two degrees; I read Political Science Education before reading Law; I graduated before my 21st birthday; so, immediately after my graduation I proceeded to read Law because that was my dream course. When I was going for my Youth Service my dad, a former State Coordinator, National Directorate for Employment (NDE), Enugu State, gave me three books to read; he said ‘Chinedu forget about white collar jobs because I believe that you are going for service with the hope that when you finish I am going to make a way for you.’ That there was no way for him to make for me, that I am going to establish my own way. He gave me a foreign textbook on entrepreneurship, another book entitled ‘The Richest Man in Babylon’ and another one, ‘Rich Dad, Poor Dad’. So he said read these books, whatever you make from them use it and help yourself.

I started with fashion and designing. 

But before then, there is one thing that I believed in, and that is acquiring skill; my dad is a civil engineer and I see him come up with structures and it thrilled me and I felt I should have a sort of technical knowledge. However, I was not interested in Engineering or construction, I was more interested in building businesses and that may have informed my decision to go into fashion and designing in the first place. I learnt fashion and designing immediately I left secondary school; I used it to occupy myself as I awaited my WAEC and JAMB results then in Abakaliki, Ebonyi State. So, when I entered the university I combined my studies with fashion and designing; but I later realized that it was a highly challenging vocation because of poor power supply and shortage of manpower.

I went to catering school following the challenges in the fashion industry. I decided to go into catering because I love cooking. When I was younger, while the boys went playing football I always joined the girls in the kitchen. So, I decided to give it a trial and I enrolled and attended Royal Institute of Catering, Agbani Road, Enugu. It was a good experience and I enjoyed every bit of it; but at a time I had to abandon the catering school when I got admission to read law at Abuja. So, I spent five years plus one year strike period making it six years at the University of Abuja. When I graduated from the school I proceeded to the Nigeria Law School, and was called to the bar in 2006; afterwards I went for my Youth Service at Osun State. After my service I returned to Enugu.

Career decision

When I was doing my chamber attachment I was with one M.O.C Okoye Chambers; so after my service I went to him. I was with him for a short while before he died; and his departure was a very serious blow to me and even made me have a re-think about the law practice. In fact, it was then I remembered what my father told me and started to think about business. I had options before me: to use my first degree, which is Political Science (Education) to teach or to continue practice as a lawyer or whether to open tailoring business or better still put into practice my catering experience.

But first I decided to try getting a job with my first degree; so I went to one private school and applied. At the end of the day they said my salary was N5,000; meanwhile I was married and I had a car already, I said no, that the money cannot even fuel my car. I also tried another law chamber in Enugu, where I worked for about a month, but the principal told me that I was not employable; I felt so bad and asked how? He said yes that I had no experience, that I need to have at least seven year experience that I am not employable; that he is making money because he worked so hard, he had practiced for over 22 years; that he will only be paying me stipend. I thought he was joking, but after working for a month, I was expecting the stipend to come but nothing came, and I was forced to quit.

Frying Akara and buying a car with the proceed

I got my first car when I was in my final year as a law student at the University of Abuja. I established a place in Asata, Enugu, where we fried Akara with a colleague of mine. That was when we had a long strike that we stayed at home for about 11 months. We` called the place Asata Bite. It happened that I visited the University of Nigeria, Enugu Campus where I used to read and I saw one woman selling Akara. I sat down, and observed how students were rushing the Akara; after sitting down and drinking a bottle of soft drink for about 30 minutes I realized that the woman was making so much money and I knew I could do the Akara better than the woman. So, I invited a cousin of mine who also attended Federal School of Catering, WDC, Enugu and we shared the idea and agreed it would be a very good business. We visited all the places where they sell Akara in Enugu, bought samples of their Akara, went home tasted and analyzed each of them. We choose three that were the best; they were so good and we went back to the women and told them that we wanted to learn how to make Akara.

They laughed at us, but two of them were kind enough and they thought us how to make Akara. So, we combined the experience from the women and what we learnt in school because most of these local women, their food may be so tasty, but their packaging and presentation may not be wonderful. So, we gave some professional touch to the Akara; we were also frying Irish potato, plantain, etc we also improved on the sauce because the women used to serve the Akara with stew or sometimes they cut onions, and mix with pepper and groundnut oil.

We wanted something different so we developed what we called ‘The Sauce’; we used variety of vegetables, it was very colourful; we had green beans, we had carrot, lots of vegetables, it was a very wonderful combination; if I give you the sauce and fried yam you won’t know when you finish a tuber of yam. The business was so good and interesting that when schools were re-opened I couldn’t go back because we were making a lot of money. We started with less than N3,000, but we made so much money that I returned to Abuja and told them I was no longer interested; I lied that I wanted to go and manage my father’s business. My dean then, Prof Iloegbunam asked me to go to the senate and defend my request; at the end of the day the school refused to let me go and I was forced to go back and complete my law programme. Thus we closed the business, but I made some good money and I bought my first car.

Becoming a tailor after NYSC

After working for one month in a law firm without pay I decided to make use of my tailoring skills and started to work with one Idika around the Damijah area of Trans-Ekulu, Enugu. Idika is a semi-literate man, but he is a very nice man. So, I worked under him. Some of my fellow lawyers would come to me and say how, can you work under someone who did not even pass primary school, and you are a lawyer. But I would tell them that there is nothing wrong with it that I knew what I was doing.

It was from that place I discovered that I could open up an eatery here, this place where I am now. The Daddy’s Kitchen here used to be an outlet for a popular noodle; so, I met the person who was operating it, discussed with him and he agreed that I can be making use of the place; not even the inside, but the outside. So, that at the close of business at night, I may stay outside and be cooking the noodles; because I promised that I would be buying from her as long as she would allow me to be cooking in front of the shop. But she said I had to pay, and asked how much I could afford? I said N1000 and she said I should pay for three months advance and I promised to pay the coming week. I didn’t have the money then, but I returned to the tailoring shop and worked very hard, worked day and night and before the one week expired I had raised the N3,000 and I paid.

Our Daddy’s Kitchen

Daddy’s Kitchen is ‘where daddy cooks better than mum.’ Immediately I started the eatery it appeared that doors of opportunities began to open; I stopped thinking of working in a big company or a prominent law firm as I used to when I was in school. I was then thinking of how to build a big business that I would call my own. But I must recall that when she gave me the place, I did not have enough capital to kick-start the business; so, I went to my father’s house and took the spare gas cooker we had in the house, took the dinning set we had for people to sit and eat. I had no money for a signpost so I took my dad’s drawing board and begged an artist in the neighbourhood, and he wrote my business name, Daddy’s Kitchen on it, with the slogan ‘where daddy cooks better than mummy’.

To catch the attention of customers since it was at night I brought the Christmas light we used in our house the previous December and hung it round the signpost and with a small generator from my house the signpost was lit-up. Before I kicked off I shared flyers in the whole of Trans-Ekulu, and by the time I started it was interesting. Although I did not experience heavy rush initially, but with time things were improving.
Actually, I had an encounter with noodles at the University in Abuja; I observed how people were rushing to eat noodles prepared by a Mallam and I knew I could do something better than what he was doing.

The next day I went to market and bought a lot of vegetables, carrot, peas, and green beans and garnished the noodles and to know the reaction of students I became generous and they confessed it was unequalled. As they were enjoying the noodles I went to a corner and laughed; I said to myself this is money. And today, I am seeing a lot of money cooking the noodles and people are enjoying it. I have even graduated from cooking only noodles to other delicacies; I cook rice, Egusi soup, Ora soup, Ogbono soup, then I prepare my chicken, I prepare fish, I also prepare sauce that goes with the chicken and the one that goes with the fish; and people turn out very well and they enjoy my food.

Starting the business

When I started the business, I started it with nothing, but today I have 14 employees; I have staff quarters, I have three outlets, one in Damijah, I have one in Ugbo-Odogwu and one at Campus-III, Institute of Management and Technology, IMT, Enugu. Then I have my staff quarters in Phase-Six, Trans Ekulu; it is a two-bedroom apartment and I furnished it for my female staff. I have gotten a vehicle I use to run my business, I have also employed a driver that takes my staff to their places of work and also supply the materials they need to do their work.

My food

In cooking my food I make use of professional caterers; I believe that for me to succeed I need to work with professionals; so with trained personnel like myself, I believe they will deliver as I am delivering. And I achieved these within a space of two years; you can imagine the rate of growth, it was indeed very rapid. I really thank God for everything. The interesting thing about it is that I spent 12 years in higher institution, but what is feeding me and my family, what is even giving me hope of being a very wealthy man in future is not even the education I acquired, it was a course I read for less than one year and some managerial books I read.

And I have the hope of retiring from struggling, from active service at the age of 40 years. I would then move from an operator of business to an investor; because it is when I retire that I will have the time to create wealth. And by the time I retire, I have a plan of building a structure that would be yielding not less than N20 million per annum. Business is very good and I encourage the young ones to stop searching for white collar jobs and look inwards. Let them ask themselves what they can offer to the society.

 

About Post Author

Anthony Claret

Anthony-Claret is a software Engineer, entrepreneur and the founder of Codewit INC. Mr. Claret publishes and manages the content on Codewit Word News website and associated websites. He's a writer, IT Expert, great administrator, technology enthusiast, social media lover and all around digital guy.
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Shell: Not in the best interest of Nigeria

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Read Time:2 Minute, 14 Second

Malcolm Brinded, the outgoing executive director of Shell Petroleum Development Company (SPDC), says the company cannot build a refinery in Nigeria because there are surplus refineries across the world.

Brinded, who is in-charge of the upstream international unit of the company, made the statement in an interview with State House correspondents, after a farewell visit to President Goodluck Jonathan at the State House.

The out-going Shell chief in Nigeria, who led a delegation to the State House, Abuja, said rather than build new refineries, the company was divesting from those it had interest in around the world. “With respect to downstream, two comments there.
Shell is divesting from refineries all over the world because there is a surplus of refineries; we no longer own any refineries even in the United Kingdom.
“I will also say because of the surplus of refineries available in a way, one has to look very closely whether building new refineries is a good investment for anyone not just for Shell but for countries involved.

“In today’s world, not looking at the past but where we are today, there is surplus of refinery capacity which essentially means many refineries in the world run at a loss. “Which also means one can get refined products back again and pay very little for it to be refined,” he said.
Brinded said that building refineries was no longer profitable and that informed the company’s decision to invest in the gas sector.
He said Shell would continue to invest in the development of the gas sector, adding: “I do believe that investment in the downstream sector, especially gas sector in Nigeria, as I touched on, is very important.

“Nigeria has huge resources of gas that have yet to be unlocked and the potential to add to that gas not only in power but in other ways in the country.
“I think there are a lot of opportunities for Nigeria and for Shell in Nigeria and the potential much more than to consider refining.”
Brinded said it was not essential for every country to have its own refinery because they could get the capacity needed and the required refined products from available refineries globally.

On his achievement in the last 10 years in Nigeria, Brinded said the company had expanded in onshore projects and deep water development.
In a nutshell what Mr. Brinded is suggesting that Nigeria keeps on import fuel. Going to a century that Shell has been in this country they have not been of a reasonable benefit rather causing more harm than good.

What do you think?

 

About Post Author

Anthony Claret

Anthony-Claret is a software Engineer, entrepreneur and the founder of Codewit INC. Mr. Claret publishes and manages the content on Codewit Word News website and associated websites. He's a writer, IT Expert, great administrator, technology enthusiast, social media lover and all around digital guy.
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Orient Petroleum-Nigeria’s First Private Refinery

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Read Time:3 Minute, 0 Second

Orient Petroleum Resources Plc will soon commence the production of crude oil at its oil well in Aguleri Otu of Anambra West Local Government Area, former Secretary General of the Commonwealth, Emeka Anyaoku has said.

Anyaoku, the Orient's Board of Directors' chairman, disclosed this during a visit to the oil company's facilities in Anambra State. He said the company would start production in a couple of weeks; adding that the company’s service contractor had made significant progress in the acquisition of high resolution 3D seismic data over 640 square kilometers of Orient’s oil blocks OPL 915 & 916 to delineate the full extent of the hydrocarbon discoveries and prospects.

Crude oil production, when it starts at the oil well, would mark the first time crude was produced in inland basin in Nigeria. The crude will be evacuated via a 10 -kilometre flow line to a spot at Anambra River basin from where evacuation of crude would be undertaken by barges to Brass in Bayelsa State. 

According to Anyaoku,  Orient has finalised the detailed engineering and sourced the modules of its 55, 000 bpd refinery. It had also completed the geo-technical, geological and hydro-geological surveys and civil engineering works for installation of refinery equipment.

It had also completed acquisition of 7 hectares of land from Kogi State for establishment of a depot for distribution of petroleum products from the refinery to the north and other parts of the country. 

Background of Orient Petroleum

Orient Petroleum Resources Plc (OPR) was established to harness the vast but mostly untapped mineral, agricultural and human resources, especially hydrocarbon deposits in Anambra Basin, for the industrialization of the area, improvement of the socio-economic well-being of the people while creating value for the stakeholders. OPR’s activities will span the entire spectrum of the upstream and downstream sectors of the petroleum industry. OPR, in partnership with other investors, will explore and produce oil and gas from the Anambra Basin. OPR will locate geological structures in which hydrocarbons may be trapped, using satellite photography, seismic surveys and other modern techniques.

The presence of oil and gas has been confirmed by hitherto drilled exploration and appraisal wells in the prospective areas. OPR, together with its other partners, will further develop viable fields with additional exploration, drilling and production activities and by building necessary support infrastructure.

The full conversion Orient Refinery with capacity of 55,000 bbls/day, shall process Anambra Basin and Nigerian Brass River crude oil feedstock, primarily for the production of gasoline, domestic kerosene, jet fuel, diesel fuel and LPG from 2009.

Orient Petroleum Resources Plc (OPR), RC No. 422200, was incorporated on 20th July 2001. The company has four subsidiaries incorporated to take care of the full spectrum of upstream and downstream oil and gas activities of the company, as follows:
a)      OPR-Refining & Petrochemicals Plc, (OPR-R&P), for the purpose of establishing and operating a petroleum refinery to process crude oil into refined petroleum products and petrochemicals.

b)     OPR – E&P Company Limited, (OPR-E&P), to manage exploration and production of oil and gas from its concessions.

c)      OPR – Gas & Power Company Limited, (OPR-G&P), to manage gas processing and supply to industries and independent power generation and distribution, and

d)     OPR – Infrastructure & Services Company Limited, (OPR-I&S), to manage necessary infrastructure and provide quality support services

About Post Author

Anthony Claret

Anthony-Claret is a software Engineer, entrepreneur and the founder of Codewit INC. Mr. Claret publishes and manages the content on Codewit Word News website and associated websites. He's a writer, IT Expert, great administrator, technology enthusiast, social media lover and all around digital guy.
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Innonson Motors: Receives Endorsement and Support from Nigerian Government

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Read Time:2 Minute, 14 Second

THE House of Representatives Committee on local content has approved the use of Innoson vehicles for its official activities.  The approval was endorsed by the law makers after visiting the motor plant at Nnewi, Anambra State.

Chairman of the House Committee on local content, Asita Honourable said they came to verify the level of local input in Innoson vehicles which is part of their official responsibilities. He said that they were happy to discover that more than half of the auto components were locally produced and urged Nigerians to patronise the company.

“The Innoson Motor Plant at Nnewi is a huge honour to Nigeria. What is going on at Nnewi is an amazing feat which needs to be encouraged. This is not an assembly plant, but a full production site where Nigerian auto engineers are exhibiting their skills. We saw them and felt extremely impressed that such marvelous feat is exsisting in the country.”

He, therefore, stated that the committee would support Innoson by using its buses in carrying out official activities. “The high standard of Innoson vehicles has made us to endorse it for our jobs. We have resolved to make it an official vehicle for the assembly.”(http://www.vanguardngr.com/2012/03/buy-nigeria-law-makers-approve-innoson-vehicles-for-official-use/)

Meanwhile…

In Enugu State of Nigeria

The loudly popular cab scheme introduced by the Enugu State Government a couple of years ago with cars such as; Suzuki Alto and Nissan Sunny, is set to have a sequel in a highly innovative made-in-Nigeria buses.

Christened Coal City Shuttle, the project will officially take off with an initial batch of no fewer than 30 purpose-built long buses from Innoson Vehicle Manufacturing Company Limited (IVM) plant in Nnewi, Anambra State, as part of the plan to give Enugu a befitting mass transit system. Innoson has also produced for the state waste management authority, a fleet of refuse compactor trucks.

Dropping these hints in a chat with Daily Sun Motoring, the Special Adviser to the Enugu State Govenor on Transportation, Prince Emeka Mamah, said Coal City Shuttle would not be just another transport scheme, but was designed to be innovative, efficiently managed and benefit from relevant modern technologies.

Prince Mamah added: “Coal City Shuttle is a project embarked on by the Enugu State Government in accordance with a key item in Governor Sullivan Chime’s four-point agenda, which is to give commuters in the state and the Coal City in particular, the best transportation system. So, you can say it is part of the dividends of democracy for the people of Enugu State”.

About Post Author

Anthony Claret

Anthony-Claret is a software Engineer, entrepreneur and the founder of Codewit INC. Mr. Claret publishes and manages the content on Codewit Word News website and associated websites. He's a writer, IT Expert, great administrator, technology enthusiast, social media lover and all around digital guy.
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Daniel: Insurance Industry Had its Finest Moment under Jonathan

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Read Time:14 Minute, 13 Second

Commissioner for Insurance, Mr. Fola Daniel, in this interview with Festus Akanbi, says the resolve of President Goodluck Jonathan’s administration to make insurance a pivot of economic development has not only underscored the potential of the sector but has also challenged operators to double their efforts

How will you describe the developments brought to bear in insurance industry under President Goodluck Jonathan’s administration?
I think President Goodluck Jonathan’s administration is making insurance the centre point of development and that was highlighted by recent pronouncements.  It will be recalled that in the 2015 Budget Speech, the Coordinating Minister of the Economy and Minister of Finance, Dr. Ngozi Okonjo-Iweala set the ball rolling by saying that the government is poised to focus attention on the insurance sector.

In his Acceptance Speech when he was returned unopposed by the Peoples Democratic Party to contest for the 2015 Presidential Election, the President devoted prime time to highlight the potentials of the insurance industry.  He is a president that is focusing on the totality of the financial services sector which is a tripod.  Once you remove insurance, the tripod becomes incomplete. So with insurance being properly brought in, you have a complete tripod to drive with vigour, the economy of this country.

The current administration has recognised the potential of the insurance industry. They see an insurance industry that can drive the Transformation Agenda which is one of government’s main thrust. They see an insurance industry that is capable of generating employment and a springboard for curbing social discontents.   Insurance industry, inclusive of agents and brokers, currently employs about 50,000 persons but insurance industry has the capacity to employ a lot more.

The President modestly calculated that he sees an insurance industry that can generate 300,000 jobs in the next two years. I think that is being modest because there is huge employment potential in the insurance industry.  For example, take a look at the Insurance Intermediary, we are selling insurance largely through brokers. The brokers are wholesalers. They are interested in big tickets and I’m sure that is where they derive big commissions or brokerage, whilst the grassroots is largely unexplored and unexploited. We can take some graduates off the street by employing and training them as agents to go to every nooks and crannies of the country to sell insurance thus earning a living. So the President should be given the credit for recognising the potential of the insurance industry and setting a goal for the industry.

What are the measures being put in place to achieve this potential you just talked about?
If you compare our insurance laws with similar laws all over Africa, I think we have the largest number of compulsory insurance such as Motor (Third Party), Group Life, Builders’ Liability, Occupiers’ Liability, Marine Insurance etc. We have 12 compulsory insurances, but these compulsory insurances are just there in the books. They are just there as laws, many people are not even aware of it. So what did we do in the last five years? We tried to create awareness. We sensitised Nigerians first about the existence of these compulsory insurances, how it is best as a means of managing our risks than the Ad-hoc assistance we get from government in times of trouble or turbulence or losses, so we have done that over the last five years and I’m glad to say that there is enhanced awareness amongst the populace. The income of the insurance industry in the last seven years has more than doubled. In fact, in the year 2007, we had an income of slightly N100billion but as at last year, we posted over N300 billion

Even if you look at the insurance sector in the whole of Africa, we ranked number five while South Africa ranked number one up to year 2012.  Yet we have the largest population on the continent and a large economic base, so there is no reason for us to be in number five.  Happily, last year, we came to number three.   So, we are making some progress but I know we can do better.

Are you saying in essence that the pledge by the Coordinating Minister of the Economy and Minister of Finance that insurance will become one of the channels to develop the economy is achievable?
The Coordinating Minister of the Economy and Minister of Finance is a technocrat in government. She is an economist of repute and a woman of honour who is not given to making empty promises. When she makes a pronouncement on issues, she follows it through.

We had an insurance summit in December last year. The conception of that summit commenced on November 26. It was her brain child. She called me on November 26 saying the government needed to support insurance sector having recognised what we had done so far. We subsequently agreed on an agenda that we should brainstorm through a summit.

At the end of the day, we had a very successful summit that even drew participants from outside Nigeria. It was well attended.  One of the resolutions that emerged from the summit is that government would focus on insurance to strengthen it to perform its pivotal role in the nation’s economy. Again, within two weeks of that summit, a budget presentation was effected by the Coordinating Minister of the Economy/Minister of Finance and she reiterated Government’s resolve to support insurance growth.  Closely followed was Mr. President’s statement on insurance in the course of his acceptance speech as candidate of the ruling party for the coming elections.

Will you say you have achieved much in the area of consumer protection?
I’m very delighted to say that our quest to protect policy holders is succeeding. When I came on board in 2007, on average on weekly basis, we received 15 to 20 complaints from members of the public against insurance companies. We then reinvigorated the Complaints Bureau. We engaged more professionals and strengthened the Bureau.  We thought these complaints would have quadrupled but because of the measure we took. Two months after I took over, we sanctioned two insurance companies, which hitherto were considered untouchable and that sent the correct message to insurance practitioners that it is no longer going to be business as usual and they were compelled to improve significantly on claims settlements processes.

We are not done yet because we believe that insurance companies must engender the kind of confidence that you find in insurance industry in United Kingdom, US and South Africa. Therefore we said, even though we saw some improvements, we still decided that we still need to keep on with the pressure.

What we did next was to set up a Call Centre which receives complaints from members of the public real-time. We also believe in self- regulation therefore we are working with the Nigerian Insurers Association to self -regulate as much as possible in the area of consumer confidence. The collaboration with NIA culminated in the setting up of an Ombudsman under the Chairmanship of a retired appeal court judge who is a very reputable gentleman. You will recall that since last January, we have been repeating a publication in newspapers asking insurance consumers that are aggrieved due to denial of genuine claims or delay in settlement to come forward and lodge complaints.

Insurers generally find this pressure discomforting and it has yielded accelerated attention.  We will continue with this drive until we are able to achieve zero case of complaints for delayed settlement or denial of genuine claims.

How is NAICOM responding to changes in global insurance market?
The key changes you will find in the global insurance market are mainly centered on improved confidence, trust, depth, capacity and sound business practice.  So all the measures we have taken in the last few years are to ensure we are on the same page with international community.

Insurance is an international business and therefore, people should not be in Lagos and want to buy policy in South Africa or UK just because they can afford it. They should have an insurance industry they can trust. They should have an insurance industry that when an accident happens, people can simply exchange their cards and go their different ways with the assurance that the insurance company will not only come and remove those vehicles from the road but will even give you something to use while they effect repairs on the cars.

What is the latest on the collaboration between NAICOM and Securities and Exchange Commission to investigate some alleged diversion of investors’ funds?

The collaboration is not just between NAICOM and SEC. It is amongst financial services regulators namely, CBN, NAICOM, SEC, NDIC, PenCom and CAC, etc. We have regular meetings where we exchange ideas and compare notes about our regulated entities. As for SEC, we have had a very good and robust collaboration and it is working.

Can you give us the progress report on your zero tolerance policy on claims settlement?
I believe I dealt with this sufficiently earlier.   Nevertheless, I think you are referring to our Consumer Protection initiatives on claims settlement.   If you are a doctor and a patient runs to you to complain, you don’t just give him a painkiller to cure that headache. That may do it but you really need to investigate why this guy is having recurring headache. Why do we have incidence of unpaid claims in insurance industry in the past? The truth of the matter from our investigation and analyses showed that a lot of these premiums are not even paid. Insurance is one of the few products that are bought on credit in this country.

People are taking insurance and owing insurance firms infinitely. We have a situation where an entity is insured for four years and it hasn’t paid premiums at all. So if an insurance company is not receiving premiums, it will not have money to pay claims. Insurance provides mechanism to pool premiums from different persons in order to meet liabilities and claims.  Money therefore becomes available to grow the portfolio, run administrative duties and management expenses but when this money is not paid, the insurance industry is rendered incapacitated and that was where we found ourselves, which compelled us to invoke the “No Premium No Cover” provision of Section 50 of the Insurance Act 2003. We don’t enact law because NAICOM is not a parliament but we implement policies as regulators.

The “No Premium No Cover Policy” predated the 2003 Insurance Act. The law was there but it was not being implemented resulting in almost the death of the insurance industry. So when we invoked it from January last year, we saw an upsurge in cash flow of insurance firms.  So, if we have removed the major reasons why they were not paying claims, then they no longer have reasons not to pay genuine claims. Therefore, if you look at the financial reports of insurance firms in 2013 and 2014, you will find minimal outstanding premiums.

For the first time, our fellow African brothers came to Nigeria to copy from us. Even though some of them do not have the legal backing, they administratively introduced the policy of No Premium No Cover and it is working for them. All the French speaking African countries have copied the no premium no cover policy. So, I’m glad that the culture is not limited to us but it is spreading all over Africa.

How will you address the issue of rate cutting in insurance industry in Nigeria?
Rate or rating refers to consideration paid by Insureds for their risks carried by insurers.  Rates can be viewed from three perspectives.
The first category relates to compulsory insurances such as Motor Third Party Insurance.  The approved rates stipulate that the insurer cannot charge beyond a maximum of 10 per cent.  This provision became necessary to avoid exploitation of the insuring public.  The nemesis of this arrangement is that no minimum is stipulated, leaving Insurers to apply discretion.

The second category of rate falls within what I will call commercial underwriting for domesticated risks.  Now what are the factors determining the rates? You look at the risks factors and measure put in place by the insured to determine whether the rates applicable should be reduced or increased.  When underwriters reduce rates in defiance of this technical consideration, it is generally referred to as rate cutting.

The third category of rates is big ticket risks such as Oil and Gas, Energy, Aviation etc.  Many rates falling within this category are rates that emanate from Lead Reinsurers abroad.  Such risks are shared across international borders and Nigerian Insurers may not have the sole prerogative to determine the rates.

So generally speaking, rate cutting in the Nigerian Market affects Motor Underwriting and all other largely domesticated businesses.  Where our Insurers are jettisoning the well-tested underwriting considerations of appropriate rating to succumb to rate-based market-driven competition, it is a problem that is as serious as the incidence of nonpayment of premium earlier discussed.  It has the potential of eroding the profitability of Insurance companies thus making investment in that Sector unattractive.

I am glad to note that all the stakeholders have realized this issue as a monster that must be curtailed very quickly.  I am aware that concerted effort is presently ongoing to inject sanity into the rating regime
We expect that the ongoing effort will culminate in agreed rating standards which NAICOM would be obliged to approve and ensure its enforcement in the interest of all stakeholders.

Why is it difficult for regulators to bail out weak insurance firms like the rescue package we had in the banking industry?
Insurance is a risk transfer mechanism.  Therefore unlike bankers, insurers are not deposit takers.  Whereas a banking institution could be in possession of Trillions of depositors’ money, insurers who assume risks worth Trillions, keeps only a negligible portion of that risk usually within a proportion of their Shareholders’ Fund.  The excess is transferred to Reinsurers whilst a portion to Retrocessionaires.  Through this chain of risk spread, the collapse of one particular insurer cannot pose systemic risks.

In addition, recoveries will usually come from those who initially share in the risk. Because the risk which primary insurance firms share is well spread in such a way that even when there is a problem, those who are insured by this firm are not going to suffer irreparable loss because this company that is in crisis has recoverable from the reinsurers and if there is a significant crisis, what the regulator will do is to ring-fence the resources of those insurance companies to enable it to pay the policyholders.

A particularly large loss may, for instance, lead only to a momentary diminution of the Shareholders’ Fund (temporary insolvency) with a window for the Shareholders to fill the financing gap.  The AIG crisis did not emanate from its core insurance activities, but from their unregulated activities.  A collapse of an insurance entity, though may affect consumer confidence, will not affect the economic system the way the collapse of a major bank will.

Why can’t NAICOM enforce compliance with compulsory insurance using security agencies?
As a regulator, I have to collaborate with law enforcement agencies to enforce compulsory insurances. We however have limitations.  For instance, we have to work with the police who are already fully engaged thus making it difficult in addition to the huge resources required to conduct a nationwide enforcement.  As part of our strategy, we realized that it is not fair if we do not educate the people before we start to enforce the laws. When people see values, there will be large voluntary compliance and that is what we have done.

The police have been overstretched. We use police on ad-hoc basis.  So we are looking at what we can really do; we are looking at the totality of the stakeholders. The law stipulates that 25 per cent of the net premium in respect of compulsory insurance should be set aside for the purpose of providing grant or equipment to institutions engaged in fire fighting services. It means if the rate of compliance is high, then the fire services will get more from the insurance industry.

We are therefore reinvigorating our awareness campaign and stakeholders engagement to engender compliance.  We are also happy to note that some state governments have passed laws to support the National Laws on compulsory insurance.  Where we have apparent breaches, enforcement remains an option to adopt.

About Post Author

Anthony Claret

Anthony-Claret is a software Engineer, entrepreneur and the founder of Codewit INC. Mr. Claret publishes and manages the content on Codewit Word News website and associated websites. He's a writer, IT Expert, great administrator, technology enthusiast, social media lover and all around digital guy.
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Aganga: Access to Funding, Market Critical to SMEs Growth

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Read Time:9 Minute, 59 Second

Minister of Industry, Trade and Investment, Dr. Olusegun Aganga, says the Federal Government has assisted the SMEs sector by creating access to funding and market in a Fidelity Bank-sponsored radio programme on the development of small and medium scale Enterprises monitored by Sandra Alumona

What are those major initiatives that are relevant to SMEs that your Ministry has introduced?
Let me start by congratulating Fidelity Bank for introducing this radio programme. It is so effective and is an important thing and it is also very relevant to our economy, given the size of SMEs in the country. Now, for the first time in the history of this country, we have done quite a number of things. Today, we see the micro, small and medium scale enterprises (MSMEs) as a sector. Up until now, they used to grow on their own and less than eight per cent of them had access to finance. They were not supported in anyway, which was why President Goodluck Jonathan in 2014, launched a new National Enterprise Development Programme (NEDP). What that means is that we see the MSMEs as a sector. We have identified the seven barriers to growth which includes access to affordable finance, cost of doing business in the country, access to market and linking innovation to SMEs and the training requirements.

So, for the first time in the history of this country, we now have an MSME Council which is chaired by the Vice President of this country. The idea is to coordinate and harmonise everything we do in that sector because there are so many ministries involved in this. What are we doing in making sure that the MSMEs have access to accordable finance? What are we doing in terms of business advisory services and skill? What are we doing in terms of market access? Those are the initiatives that we have because SMEs are the most important group in the economy today.

Let’s talk about what Fidelity Bank is doing.  The bank has taken the cluster approach to funding SMEs. They have the Aba cluster. I know the federal government has the cotton, textile and garment (CGT) as well as the automotive cluster approach. What are the benefits of having these cluster approach?
First of all, let me congratulate Fidelity Bank for doing this. I was in Aba for two weeks and I saw the clusters. It is an innovative way of addressing the needs of SMEs in Nigeria by the bank. It has happened and it is in use in many other countries and it has worked. We are doing the same thing in the country today. The president has just approved the conversion of our 23 IDCs into industrial cluster parks for SMEs across the country. What it means is that all the necessary amenities they need, for example electricity at a cheaper rate, incentives would be there and other things that are barriers to growth of SMEs would be addressed there. Clusters helps to have access to market and more importantly, it also helps in terms of making funds available to them and enable them operate as cooperatives, which makes it easier. You know MSMEs don’t have the collateral we are looking for, neither do they have the assets to support it, but with that approach, it is easier for you to recover your money, it is easier for you to have small and growing businesses that employ people. So, overall, it is a win-win situation. In our case, what we are trying to do at the IDCs, is to make sure that they have shared services. Some of them do not have knowledge of how to start and grow a business.

So, the idea is to have some shared services there, in term of accounting and marketing, so that it is a lot easier for them. At some stage, we would also be targeting the export market. So, it is a brilliant idea and it is something the government has also adopted. We are working with the World Bank today, to appoint Special Advisers for the 23 IDCs. For three of them, we have an agreement with the World Bank to upgrade. What we are going to do with those three is that we are going to identify youths in some sectors of the economy, train them and make sure that they are capable of running their own business, put them in the parks, organise access to finance for them and give them a place to stay for at least one year to run their businesses before they move outside the park.

Nigeria doesn’t always rank very high on the World Bank’s ‘Ease of Doing Business’ report. What is the government doing to make sure that the ease of doing business in Nigeria is a lot smoother so as to boost our raking?
Again, for the first time in this country, we are taking this very serious. You are absolutely right about the importance of that survey. So, we have studied it and we have an investment climate reform programme which target states in terms of where we go. For example, according to the World Bank, it takes a minimum of one month to register a business in Nigeria, which is absurd. If you look at the SMEs today, 85 per cent of them operate in the informal sector. So, today, we now have online business registration and e-payment.

I tried that payment on the day of the launch and I did it in 10 minutes. So, we have moved from a country that actually takes a minimum of one month to register a business, to one that takes minutes and you will see that reflected in subsequent rankings. The second thing which we are doing is at the state level. So what we are doing is sub-national business ranking, and what we did was to rank all the states for those that came first, second and third and we are compiling these factors in each of the states. We share these factors among the states and work with them to improve viable access to land, the C-of-O signing. We would take these factors and share it with other states and in that way, we would improve our raking. So, it is important and we are addressing it.

What are you doing to make sure that SMEs have more access to long-term finance and equity finance?
If you look at the survey we conducted with the Lagos Business School recently, it is actually very disgraceful that as a country where you have 32 million people in the SME space, there is no support for them in terms of access to finance. Yes, we do have the Bank of Industry (BoI) and the others, but the amount of money they have for the sector is so small relative to the needs and as a country that wants to have inclusive economic growth, you cannot ignore the sector. So, it is a disgrace that past governments did not take this sector seriously and that is the change which President Goodluck Jonathan has introduced.

So, part of what we are doing to address this is to make sure we look at all the intervention funds we have in the country and make sure we put them together and know why people are not accessing them. For example, we just set up a committee to work with the CBN on the N220 billion to make sure that people get enough access to it. So, we are working with the CBN to make sure that it is quicker for SMEs to access the fund. Another thing which they ask for is collateral. They don’t have collateral and so there must be creative ways to do this. Indonesia does that and the recovery rate is 90 per cent. So, there are things we can learn from Indonesia and Brazil. Of course, we need to look at SMEs credit ranking scheme. One of the reasons why they are unsuccessful to raise funds is the quality of their account records and business plan. Today, we are now institutionalising a new scheme called the Business Development Support providers for SMEs across the board.

The BoI has contracted about 100 of these people. The World Bank is going to work with us to appoint at least one in each political zone and they would be working with the SMEs to prepare their business plans’ access funds and get them out into the market. Another way of doing this is encouraging the development of the private equity and venture capital sector. Venture capital will bring in, not just a loan which you get from banks, but they will bring in equity capital and they bring in the business development support services. They train you, help you develop your business, then at some stage, you hand over to the private equity, who buy it later. So, we are working on new rules, new regulations. We have had a committee working on this for eight months and now we are at the implementation stage. Hopefully, before the end of this administration, we shall have regulations and rules that makes it a lot easier for more venture capitalists to come in to play.

What is your ministry doing to make sure more SMEs have access to market?
It is clear that if you produce your products and you can’t sell it, you won’t MAKE MONEY. So, access to market is critical for a sector. There are number of things we are doing and have done, for example on what is happening in the United State of some percentage of federal government contracts going into the SMEs sector to encourage the sector, we now have a policy we are putting in place to ensure that a percentage FG contracts goes to that sector. Already, there is something that is not working enough, so we need to intensify and look into that again. So, that is a critical part for government.

Government spending must go into developing the economy itself and generating inclusive economic growth. So, we agree to that, it is not only the US that is doing this, Brazil is doing this and a number of countries are doing this already. Number two is to have a strong, viable and vibrant commodity exchange because even when you talk about SMEs it includes the farmers. Today, we say agric is a business, so, farmers are included too. Access to market is to have a strong and viable commodity exchange, again which we have in six geo-political region. But the innovative way we are doing this as well is value chain partnership is that we are looking at the top 50 corporations in the country and we are looking at the supply chains and how we can use SMEs as part of that supply chain. I will give you an example, Nigerian Bottling Company already does this and Nigerian Breweries is also doing this.

The idea is to find out the supply chains, look at where opportunities are for SMEs, and advertise those areas and get to work with large companies. When they do this, they get access to finance and they there is a system to produce their goods to international standard. So, to some extent you can start exporting, that will be a big way because we now be developing quite large companies that will be doing well. And, across the value chain, there are so many things that SMEs can supply but they are not aware of it. So, the first thing to do, is to identify them, make we publicise them and ensure that, they are part of that value. That will be an effective game changer in the country and that is what we are working on.

About Post Author

Anthony Claret

Anthony-Claret is a software Engineer, entrepreneur and the founder of Codewit INC. Mr. Claret publishes and manages the content on Codewit Word News website and associated websites. He's a writer, IT Expert, great administrator, technology enthusiast, social media lover and all around digital guy.
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We have demystified the oil industry – Alison-Madueke

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Read Time:7 Minute, 10 Second

The Minister of Petroleum Resources, Mrs Diezani Alison-Madueke, recently fielded questions from a select group of editors to clarify a number of issues in the oil and gas sector ranging from the controversial kerosene subsidy and alleged subsidy scam to the allegation of $10bn expenditure on jet private hire as well as the PwC audit report. Excerpts.

On Kerosene Subsidy

There was a Presidential directive to withdraw subsidy on kerosene. It is possible that the Minister of Petroleum at that time must have gone to discuss it with the President and may have been able to convince him on the need to stay action on the directive. I assume that that may have been what happened, that he had a discussion with the President but he overlooked regularizing in terms of getting him to rescind the order.

 

So, if anybody flouted the Presidential order then it must have been the Minister of Petroleum at that time. But since the directive was not gazetted and was not announced it was not a law; it was mainly a directive on paper because there are procedures that a directive must follow to become a law and become implementable. I don’t know why people keep referring to this. But anyway, another president came and appointed his own cabinet and moved on.

Now, because of the confusion created by this situation, marketers who, prior to that time, were bringing in kerosene pulled back. The reason was that if they brought in kerosene at the international landing cost and sold at our subsidized rate and didn’t get paid the difference, they would go bankrupt.

So, there was immense confusion and I think it was at that time that the NNPC had to step in and started supplying. That was before I became Minister of Petroleum.

This was where the problem of deduction of subsidy claims at source started. The issue of deduction at source has also been severally argued as to whether NNPC has the right or not to cover all those particular expenses from crude oil sales proceeds.

That was the situation with subsidy at that time. When we came out in January 2012 to try to regularize the system by removing subsidy on petroleum products, of course we all knew what happened.

Efforts to Rid the Subsidy System of Corruption

So, based on all that, subsidy on petroleum products continued up to this point. It is a sore point because, in all honesty, just like PMS, it is a very difficult issue to handle. It becomes even more difficult when revenues are falling because of the price of the barrel.

It is very difficult to pay vast amounts on subsidy which we don’t believe is getting to the actual users, the bottom line users of the PMS, but which is instead making middlemen fat. But we wanted to remove the subsidy. We wanted to deregulate too because we discovered that there was corruption in the subsidy system which had gone so bad that we were not able to move products seamlessly from one point to another.

There was arbitrary price increase in some areas and products were selling above the regulated price thereby making nonsense of the subsidy scheme.

Then there was round tripping, terrible incidence of round tripping. It got to the point that I even had to get the permission of Mr. President to invite the EFCC to come and look at the books and help us figure out what was happening because the level of PMS import we were getting clearly showed that something was wrong.

That was in 2011. At some point the round tripping was extended to kerosene which was being diverted and sold as aviation fuel. Marketers would take their allotment of kerosene and sell it as aviation fuel which is more expensive. You know the kerosene that is imported into Nigeria is of the same specification as aviation fuel.

That is why it is called Dual Purpose Kerosene (DPK). It was not profitable to import what is really the base level of normal Household Kerosene (HHK). These were some of the problems we had. As I said earlier, we had written to the EFCC and didn’t get any response, that meant no solution. In November 2011, even before we tried deregulating, I removed 92 marketers with one stroke of the pen from the PPPRA books, these were throughput marketers who didn’t have tank farms, who didn’t have any real investment in the sector.

We took this action because the level of investment into tank farm is so huge that if you can do it you won’t want to get involved in any shady deal. Besides, such investment entitles you to carry out throughput for other marketers and they will pay you to do that. By the law that is acceptable. That law wasn’t made in our time, it was there before we came in. So it was clear to us that the problem of round tripping was coming from those who didn’t have hard investments in the sector. And there were 92 of them in our books which we flushed out.

That was when I brought in Reginald Stanley to head the PPPRA. The fellow I brought in before didn’t seem to have helped in sorting out the issue at all because it looked like it was getting worse. I asked Stanley to try and reform the petrol importation and subsidy system to bring the subsidy bill down.

I told him that after stabilizing things we could bring some of the throughput marketers back, those who pass certain expectations, because it is in our laws, it is not as if throughput marketing in itself is illegal. So I signed them off, 92 marketers in one day. It was after I dropped them that the level of subsidy dropped significantly.

Strides in Local Content

We have been able to domicile some of the jobs in the sector that used to be carried out overseas within the country thereby creating jobs for many Nigeria youth. Manufacturing of small parts for the oil and gas sector is now being done in-country which was not the case before now. It is not just the manufacturing but the quality of the goods is such that we now have prospects of producing for other multinationals outside the country.

This has helped to create a lot of direct jobs over this period of time and hundreds of thousands of indirect jobs. It was a thing of joy for me when I visited places like the burnt down Okrika Jetty a couple of years ago to commission the products loading arm that was rebuilt only to discover that companies like Lee Engineering which did the construction of the project from A to Z was 100% Nigerian, all the engineers are Nigerians.

We are very proud that this sort of thing could be happening at this point in time. Now, these are major steps in the oil and gas sector because it is highly capital intensive, highly technological. We have been able to achieve this because we understand that until you get the industry down so that it can touch what I consider the real economy, until you begin to commercialize it, oil & gas always seem to be up there, a sort of mysterious sector for the very wealthy, extremely wealthy.

The multinationals have access to billions and billions of dollars, but we are beginning to pull it down so that ordinary people who can gather together the financial wherewithal can also be players in the sector. Like I said, not all of these are highly capital intensive, there are many other areas that are quiet minor in terms of capital outlay. Many people are coming in now. And this was the intent from the onset: to demystify this sector. On the Nigerian content side, I think we have done very well and we will continue to try to do even better.

Gas Infrastructure Development

During this period too, we started looking at what we could do to develop our gas resources. We have to pull out gas issues from the PIB and specific gas projects from the Gas Master Plan to implement to fast track gas to power, gas to industry and of course to ensure that value is added to the economy.

– See more at: http://www.vanguardngr.com/2015/02/we-have-demystified-the-oil-industry-alison-madueke/#sthash.YocgtLzW.dpuf

About Post Author

Anthony Claret

Anthony-Claret is a software Engineer, entrepreneur and the founder of Codewit INC. Mr. Claret publishes and manages the content on Codewit Word News website and associated websites. He's a writer, IT Expert, great administrator, technology enthusiast, social media lover and all around digital guy.
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Nigeria FG contracts must involve indigenous freight forwarding component — NCT

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Read Time:1 Minute, 59 Second

The National Council on Transport, NCT has said that the freight forwarding components of all government contracts must be handled by indigenous operators.

The council took this decision at its last meeting following the recommendation of the Council for the Regulation of Freight Forwarding in Nigeria, CRFFN. The council comprises Minister of Transport, the Permanent Secretary, Commissioners for Transport and their Permanent Secretaries at the state level as well as the heads of transport related institutions across the country.

Disclosing this in Lagos over the weekend, Registrar of CRFFN, Mike Jukwe, said the decision was taken to empower local operators. He explained that the implementation of the decision will help protect the economy as well as provide security for the country by ensuring that dangerous goods do not find their way into Nigeria unchecked.

According to him, “The National Council on Transport has insisted that all federal government contracts that have freight forwarding components in line with the local content policy should be handled by Nigerian freight forwarders.

“We are also going to insist that this provision of the resolution of the NCT is implemented to the latter . And let me tell you why foreign companies do freight forwarding in Nigeria, it is because of the aspect of door to door. Door to door is involved in any freight forwarding business. For instance a shipper in Europe that has a subsidiary in Nigeria that is into freight forwarding, will prefer that the company carries out the business of freight forwarding on their behalf.

“By selling Door to Door, there is a prepared agreement where the freight forwarding component is also embedded in the contract. We will work on that because in Nigeria we hardly do most of the Door to Door. With the Door to Door, they are taking the business away from us.

“So it is for us to fight and agree that the component is not included in any agreement Nigerians are signing with their foreign shippers. That should be left out, so that when the cargo comes in, it will be cleared locally. In our own regulations, for a foreign company to operate in Nigeria as a freight forwarder, one of the conditions is that the Chief Executive Officer, CEO or the Chief Operating Officer, COO must be a Nigerian and we will enforce it,” he concluded.

About Post Author

Anthony Claret

Anthony-Claret is a software Engineer, entrepreneur and the founder of Codewit INC. Mr. Claret publishes and manages the content on Codewit Word News website and associated websites. He's a writer, IT Expert, great administrator, technology enthusiast, social media lover and all around digital guy.
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2015 budget: N5.9bn can’t fuel police vehicles in 3 months – IGP

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Read Time:3 Minute, 21 Second

ABUJA – INSPECTOR-General of Police, IGP, Suleiman Abba yesterday lamented that the N5,895,797,734 budgeted for all subheads in the Overhead Cost for Police Formations and Commands in the 2015 budget was not enough to provide minimal fueling and maintenance cost for police operational vehicles for three months.

IGP Abba who stated during his 2015 budget defence with

the Senate Committee on Police Affairs in Abuja said that .paucity of fund occasioned by the envelop concept of budgeting have become an impediment towards police meeting up with its constitutional requirements.

He said that every year the Police were given specific amounts for its Capital and Recurrent budgets tagged ceiling or envelope that never reflected the enormous size, scope and responsibility and actual needs of the force.

He even noted that in 2014 budget, a capital vote of N218 billion was proposed but it was later replaced with an envelope of N7.34 billion, adding that even out of that, only N3,453,492,502 representing 47 per cent was released as at December 31 of the year.

He also said that out of N8,499,861,314 that was appropriated for Overhead cost expenditure for 2014, only N5,708,229,318 was released and out of that, N5,000,000 was deducted at source for electricity bills, while the sum of N2,791,631,996 representing 32 percent was not released.

He even lamented that N287,061,950,723 was appropriated for personnel cost as against the computed sum of N293,526,624,260 required to pay personnel salaries and allowances using the template issued by the Budget Office of the Federation and that the reduction of the personnel cost by N6,464,673,537 were unable to conclude payment of salaries.

The IGP who was represented by the Deputy Inspector General of Police, DIG Ibrahim Tsafe, also said that the N329,669,237,019 being the budget estimate of the force in 2015 also through the ‘envelopes’ or ceillings’ for the police did not reflect the actual needs of the force.

He noted that the N5,895,797,734 projected for all subheads in the Overhead cost for police was grossly inadequate and cannot take care of the minimal fueling and maintaining of 13,083 vehicles including 2,937 motorcycles nationwide.

“This is not to mention other critical subheads such as local travels and transport allowance, aircrafts, marine boats, local and international training costs, maintenance of buildings which include offices and barracks, feeding of detainees nationwide, provision of uniforms and accommodation among others.,” he stated.

On the Capital Projects, he said that “The Capital budget is a far cry from the minimal requirement of N218 billion contained in the outcome of the Medium Term Sector Strategy, MTSS. However, the proposed capital proposal based on the envelope will be utilized to address security challenges especially, violent crimes such as terrorism, kidnapping, armed robbery and to ensure the maintenance of law and order.”

The IGP also disclosed that about N252 million will be required for the procurement of Dogs and Houses Equipment and Establishment of Veterinary Centres and that the animals were essential in police operations especially in the detection and prevention of crimes and in the maintenance of law and order..

He explained that, “The sum of N80,000,00 each is proposed for these purposes, while a total of N252 million has been projected for the establishment of veterinary clinics, diagnostic and breeding centres to carter for the needs of these animals.”

Chairman, Senate Committee on Police Affairs, Senator Paulinus Igwe advised the police to find a way of generating its revenue going by the fact that the oil which had been the nation’s source of income was dwindling.

DIG Tsafer in an interview said that Police force was not a revenue generating organization but promised that since the senate has directed that it should generate its own revenue, , that the force would look inwards.

About Post Author

Anthony Claret

Anthony-Claret is a software Engineer, entrepreneur and the founder of Codewit INC. Mr. Claret publishes and manages the content on Codewit Word News website and associated websites. He's a writer, IT Expert, great administrator, technology enthusiast, social media lover and all around digital guy.
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